Tod’s Hong Kong is continuing to suffer from the luxury spending downturn – and may close some stores.
Milan-based luxury goods brand Tod’s says while the Mainland China market “has stabilised” there has been “no improvement in Hong Kong”.
The company was commenting with the release of its 2015 trading figures, reassuring shareholders that despite the Hong Kong woes it remained on track to deliver a 5 per cent rise in revenue this year, despite falling same-store sales since January 1.
Tod’s Hong Kong has 14 stores.
CFO Emilio Macellari said during an analysts call the company had been unable to renegotiate any of its rents in the territory – but had avoided rent increases at two malls. As a result it may close one or two stores.
Globally, it plans to reduce the number of new store openings from 31 last year to between 15 and 20 this year, recognising slowing growth worldwide.
More than 20 per cent of Tod’s global sales are in Greater China – but they shrank 12 per cent last year on a constant currency basis, with Hong Kong and Macau accounting for a majority of the decline.
Sales in Japan and the US are also declining but the brand was holding its own in Europe, especially its home market Italy.
Despite declining sales, the company reported a 5 per cent increase in earnings for 2015. Macellari said the company’s strategy of widening its product range to include handbags and apparel would help restore growth and meet forecasts.